The India-Oman Comprehensive Economic Partnership Agreement (CEPA), which entered into force on Monday, eliminates tariffs on most Indian exports to Oman, covering about 99% of the value of India’s shipments to the Gulf state. The agreement comes at a time when India is seeking to safeguard critical supply chains amid ongoing turmoil in the Middle East following U.S.-Israeli attacks on Iran on Feb. 28.

Indian officials and trade experts say the pact assumes added significance as the closure of the Strait of Hormuz threatens one of the world’s most important energy and shipping routes. Despite efforts to diversify sourcing and transport networks, India remains dependent on the corridor for roughly 30% of its crude oil imports and about 90% of its liquefied petroleum gas imports.

In a statement, India’s Ministry of Commerce and Industry said Oman’s ports of Sohar, Duqm and Salalah would provide Indian exporters with enhanced access to Gulf and East African markets, helping establish what it described as a new trade gateway for Indian businesses.

Anil Wadhwa, a former Indian ambassador to Oman and a distinguished fellow at the Vivekananda International Foundation, said the agreement had acquired immediate strategic relevance because of the regional crisis.

“The coming into force of the CEPA between India and Oman has immediately gained significance due to the crisis in the Middle East and the closure of the Strait of Hormuz,” Wadhwa said, adding that the pact offered India alternative logistics channels, transshipment facilities and stronger commercial linkages at a time of growing uncertainty in global supply chains.

He said the agreement would not fully shield India from the broader economic consequences of a prolonged regional conflict but could help mitigate disruptions by preserving access to key trade corridors.

The CEPA is India’s second bilateral trade agreement with a member of the Gulf Cooperation Council after a similar pact with the United Arab Emirates signed in 2022. For Oman, the deal is its second bilateral free trade agreement after its accord with the United States in 2006.

Oman is India’s second-largest trading partner in the Gulf region, with bilateral trade exceeding $11 billion in the 2025-26 fiscal year.

Industry groups view the agreement as a mechanism to strengthen India’s manufacturing exports while reducing logistical dependence on routes affected by the Hormuz crisis.

Manish Mohan, senior director at the Confederation of Indian Industry, said the prolonged disruption of shipping through the strait had heightened concerns over fuel imports, fertilizer supplies and freight costs.

India, the world’s second-largest fertilizer consumer after China, uses more than 60 million tonnes of fertilizer annually. The conflict involving Iran has affected fertilizer supply chains, with Gulf producers accounting for about one-third of India’s imports of urea and phosphate-based fertilizers.

Mohan said Oman’s location outside the Strait of Hormuz increased its value as a commercial hub and alternative entry point for Indian imports if regional instability persists.

The agreement is also expected to support investment flows and deepen economic ties between the two countries, while providing Indian exporters with improved access to markets across the Gulf and eastern Africa through Omani ports and logistics infrastructure.

Saudi Arabia, the United Arab Emirates, Qatar, Egypt, Jordan and the Gulf Cooperation Council (GCC) issued statements denouncing the strikes and expressing solidarity with Kuwait and Bahrain.

The GCC called the attacks an “unacceptable hostile policy,” while Secretary-General Jasem Mohamed Albudaiwi said the strikes represented a dangerous escalation threatening regional and international security.

Iran claimed responsibility for attacks on U.S. military assets in Kuwait and Bahrain, including facilities linked to the U.S. Fifth Fleet. Kuwaiti authorities said missile strikes caused significant damage at Kuwait International Airport, temporarily disrupting operations before flights resumed later in the day.

Kuwaiti air defenses intercepted missiles and drones as warning sirens sounded across the country. Kuwait said the attacks violated international law and undermined efforts to reduce regional tensions.

Saudi Arabia, the UAE and the Gulf Cooperation Council also condemned the strikes, expressing support for Kuwait.

Meanwhile, Iran’s Revolutionary Guards said they had targeted an air base allegedly used in a U.S. attack on Sirik Island, without identifying the location of the facility.

Kuwait’s foreign ministry said in a statement it condemned the “criminal Iranian attacks” targeting the country with missiles and drones, calling the incident a “dangerous escalation.” The statement came after Kuwait’s military announced that air defense systems had intercepted and destroyed hostile aerial threats over the country.

The Kuwaiti army did not initially identify the source of the projectiles, but said explosions heard across parts of the country resulted from interception operations carried out by air defense units. Authorities urged residents to comply with official security and safety instructions.

The U.S. military later described the incident as a serious breach of the ceasefire framework that has largely held since April. United States Central Command said in a statement that the missile strike on Kuwait represented an “egregious ceasefire violation.”

CENTCOM added that Iranian forces had earlier launched five one-way attack drones posing threats in and near the Strait of Hormuz. According to the U.S. military, all five drones were intercepted by American forces, which also prevented the launch of a sixth drone.

Iran acknowledged that U.S. forces had struck what Washington described as an Iranian drone operation threatening military assets and commercial shipping near the Strait of Hormuz. Tehran said it subsequently targeted a U.S. air base at approximately 4:50 a.m. GMT following what it characterized as an earlier American strike near Bandar Abbas airport, though Iranian authorities did not specify the location of the base.

The latest exchanges mark one of the most serious escalations since a ceasefire took effect following the U.S.-Israel conflict with Iran earlier this year. Despite a reduction in large-scale hostilities since April, Gulf states have continued to report intermittent drone incursions and missile threats originating from regional flashpoints, including Iraq.

Saudi Arabia condemned the attacks through its foreign ministry, denouncing what it called the continuation of “treacherous Iranian attacks” against Kuwait. The United Arab Emirates also issued a statement condemning what it described as “terrorist drone and missile attacks” targeting Kuwaiti territory, calling them a violation of Kuwait’s sovereignty and a threat to regional stability.

Gulf Cooperation Council Secretary-General Jasem Al-Budaiwi said the continued attacks violated international law, the United Nations Charter and principles of good-neighborly relations.

The developments come as diplomatic efforts continue over a possible U.S.-Iran understanding aimed at extending the ceasefire and reopening negotiations surrounding Tehran’s nuclear program, though uncertainty remains over the durability of the truce amid continued military activity across the Gulf.

The measure, ordered by Crown Prince and Prime Minister Salman bin Hamad Al Khalifa, will cover salaries of insured Bahraini workers through the Unemployment Insurance Fund, as part of a broader government response to protect employment and support small and medium-sized enterprises.

The Gulf state has faced direct and indirect economic pressure from the conflict, including damage to industrial facilities, disruptions to shipping through the Strait of Hormuz and a decline in tourism and exports. Bahrain hosts the U.S. Navy’s Fifth Fleet and has been exposed to regional security risks during the hostilities.

Central bank measures have complemented fiscal support, with authorities injecting liquidity, easing lending conditions and allowing temporary deferrals on loan and credit card payments for businesses and households.

The Central Bank of Bahrain has also made funding available to banks against collateral to maintain credit flows.Analysts say the wage-support scheme reflects a shift in labor policy from post-crisis compensation to preemptive job protection.

Economists note that preserving employer-employee relationships during short-term disruptions can reduce long-term unemployment risks and support faster recovery.“By temporarily covering wages, it gives companies breathing space during short-term disruptions and reduces the need for immediate layoffs,” said Anthony Hobeika, managing partner at MENA Research Partners.

The approach mirrors measures adopted across the Gulf during the COVID-19 pandemic, when governments used unemployment insurance systems to subsidize private-sector wages. Bahrain itself implemented a similar program in 2020, while Saudi Arabia provided partial wage support under its SANED scheme.

Despite signs of economic resilience, including 3.5% GDP growth in 2025 driven largely by non-oil sectors, Bahrain’s fiscal position remains constrained. Moody’s Investors Service recently revised the country’s outlook to negative, citing deteriorating credit metrics and risks linked to the ongoing conflict.

The war has compounded structural vulnerabilities, including high public debt levels and limited fiscal space. Bahrain’s debt stood at roughly 140% of GDP before the conflict, according to external estimates.Regional support has also emerged, with the United Arab Emirates agreeing to a five-year currency swap arrangement worth about $5.45 billion to bolster liquidity and financial cooperation.

Economists caution that while wage subsidies can be effective in cushioning short-term shocks, their success depends on being temporary and targeted to avoid distorting labor markets.

Policymakers are expected to balance immediate job protection with longer-term goals of productivity and economic diversification.

GCC Secretary General Jasem Mohamed Albudaiwi said the Lebanese move to direct the army and security forces to enforce state authority and restrict weapons to official institutions marked a “significant step” toward strengthening sovereignty and stability. The decision aims to consolidate control in the capital and limit arms possession to legitimate state forces.

Albudaiwi reaffirmed the GCC’s support for Lebanon’s sovereignty, security and territorial integrity, stating that the measure could help enhance stability and safeguard citizens.

Separately, India’s foreign ministry said it was “deeply concerned” by reports of civilian casualties following heavy Israeli bombardment earlier this week, which killed more than 300 people according to reports.

New Delhi stressed that protecting civilians must remain a priority and called for adherence to international law, including respect for sovereignty and territorial integrity.

The escalation comes amid ongoing conflict involving Israel and Hezbollah, which has drawn in broader regional tensions linked to the U.S.-Israel confrontation with Iran.

Israeli operations in Lebanon have added strain to a fragile two-week ceasefire between Washington and Tehran, with both sides preparing for negotiations in Islamabad aimed at easing tensions.

Speaking at the Egypt Energy Show 2026 in Cairo, Sisi said only Trump had the capacity to end the conflict in the Gulf region, appealing directly for U.S. leadership to prevent further escalation.

“I tell President Trump: nobody can stop the war in our region in the Gulf but you,” Sisi said. “Please help us stop the war. You are capable of doing so.”

Sisi warned that continued targeting of oil production facilities and refineries could trigger simultaneous supply disruptions and price surges, with consequences yet to be fully realised.

He said concerns among market observers that oil could exceed $200 a barrel were credible.“I fear that targeting energy facilities, whether production or refineries, will have very serious repercussions for the global economy and fuel prices,” he said.

The Strait of Hormuz, a key maritime chokepoint that previously handled about a fifth of global oil flows, has been disrupted amid the conflict, raising concerns over sustained supply constraints.

Beyond energy markets, Sisi highlighted risks to global food security, citing potential disruptions to fertiliser exports that could drive up agricultural costs and strain supply chains.

“Wealthy countries might be able to absorb this, but for middle-income and fragile economies, it could have a very, very severe impact on their stability,” he said.

Egypt, a longstanding recipient of U.S. military aid and Gulf financial support, has condemned Iranian attacks on Gulf Arab states while advocating diplomatic efforts to avoid a broader regional war.

Gulf Cooperation Council Secretary-General Jasem Mohamed Albudaiwi said Iranian actions, including attacks on energy infrastructure and the closure of the Strait of Hormuz, constituted a violation of international law and a direct threat to global energy security.

Addressing the conference virtually, he urged the international community to safeguard maritime corridors, as GCC member states Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Oman and Bahrain face ongoing drone and missile attacks.

Sisi also referenced Trump’s role in ending the Gaza war, noting that the U.S. president had been instrumental in securing a ceasefire agreement reached in Sharm el-Sheikh in November.

In a statement carried by the Saudi Press Agency, the ministry said the targeting of Saudi sovereignty, civilian infrastructure, diplomatic missions and economic interests constituted a breach of international norms. It added that the actions violated the Beijing Agreement and United Nations Security Council Resolution 2817 (2026), as well as principles governing state sovereignty and good neighborly relations.

Saudi authorities notified the Iranian embassy that its military attaché, assistant military attaché and three additional staff members had been declared persona non grata and must leave the Kingdom within 24 hours, according to the statement.

The ministry reiterated a previous warning issued on March 9 that continued attacks would represent further escalation and have a “profound impact” on bilateral relations. It also restated the Kingdom’s “categorical condemnation” of Iranian actions against Saudi Arabia, Gulf Cooperation Council states and other Arab and Islamic countries.

Saudi Arabia said it would take all necessary measures to safeguard its security and sovereignty, invoking its right to self-defense under Article 51 of the U.N. Charter. The statement framed the expulsions as part of a broader response to what it described as repeated violations affecting civilian and strategic targets.

The ministry did not provide additional operational details on the alleged attacks but linked them to a pattern of actions undermining regional stability and diplomatic commitments.

The move comes amid heightened tensions in the Gulf, with Saudi Arabia warning that continued escalation could have serious consequences for regional relations. The reference to the Beijing Agreement underscores the strain on recent diplomatic efforts aimed at stabilizing ties between the two countries.

Saudi Arabia’s statement did not indicate any immediate diplomatic follow-up beyond the expulsions but emphasized that further actions would depend on developments on the ground.

Michael Arizanti

What impresses me most about this merger is how it’s unlocked $500 million in annual operational synergies.

I’ve been watching global economic shifts closely, and I’m convinced we in the West need to pay more attention to what’s happening in the GCC, particularly the UAE. Under Sultan Al Jaber’s leadership, the UAE isn’t just participating in the global market- they’re fundamentally changing it.

A Bold Strategic Transformation

What ADNOC and OMV just accomplished with the Burouge International Group creation blew me away. This $60 billion merger of Borealis and Nova isn’t just another corporate consolidation- it’s a masterful strategic move that happened practically overnight. As someone who follows industry developments, I was struck by how swiftly this positioned the UAE as the driving force behind what’s now the world’s fourth-largest petrochemical company.

Redefining Global Leadership

What impresses me most about this merger is how it’s unlocked $500 million in annual operational synergies. These aren’t just numbers on a spreadsheet- they represent stronger supply chains, enhanced innovation capacity, and secured market leadership. I firmly believe the UAE is setting itself up to become a dominant petrochemical force with advantages in scale, cost efficiency, and geographic reach that will be hard to match.

Why I Think the West Should Pay Attention

From my perspective, there are several compelling reasons we should look eastward:

First, the leadership I’ve observed under Sultan Al Jaber shows a remarkable ability to build strategic partnerships and embrace cutting-edge technology. This forward-thinking approach stands in stark contrast to what I often see in Western business strategies, which tend to be more reactive.

Second, creating a $60 billion powerhouse during uncertain economic times demonstrates extraordinary financial and operational savvy. This kind of economic resilience through diversification offers valuable lessons for Western economies.

Third, you can’t ignore the GCC’s strategic location. I’ve always considered their geographical position a major advantage for global trade. By engaging more with the UAE, Western nations could tap into networks perfectly positioned for future energy transitions.

Finally, I’ve watched traditional industry hierarchies being completely disrupted by these moves. Western businesses with their entrenched models risk being left behind if they don’t adapt to these new market dynamics coming from the GCC.

A Call for New Thinking

I believe these strategic developments in the UAE’s petrochemical sector offer more than just business insights — they provide a blueprint for the future. The transformation led by ADNOC, OMV, and visionaries like Al Jaber should prompt us to reconsider our priorities.

Rather than clinging to outdated approaches, I’m convinced Western economies would benefit tremendously from collaboration with the GCC, learning from their strategic insights and robust market approaches to drive global progress.

This isn’t just a shift in petrochemicals- it represents a complete reimagining of what leadership in the energy industry can look like. We have an opportunity to learn from this masterclass in strategic transformation- a powerful lesson in vision, resilience, and bold action.

Disclaimer: Views expressed by writers in this section are their own and do not reflect Milli Chronicle’s point-of-view.

Tensions have been rising between Kuwait and Iraq after the Iraqi Federal Supreme Court ruled on an agreement regulating navigation in the Khor Abdullah waterway between the two states as unconstitutional. The court said the law that ratified the accord should have been approved by two thirds of parliament.

The agreement, which governs maritime navigation in that waterway, was reached in 2012 and ratified by each of their legislative bodies in 2013.

The GCC-U.S. joint statement followed a meeting of the six-nation GCC’s foreign ministers, U.S. Secretary of State Antony Blinken and GCC Secretary-General Jasem al-Budaiwi in New York.

“They called for the complete demarcation of the Kuwait-Iraq maritime boundary …. and called on the government of Iraq to expeditiously resolve the domestic legal status of the 2012 Kuwait-Iraq agreement,” the joint statement said.

The joint statement also “called on Iraq and the UN to exert maximum efforts to reach a resolution of all the issues involved.”

The land border between the two was demarcated by the United Nations in 1993 after Iraq’s invasion of Kuwait, but it did not cover the length of their maritime boundaries, and this was left for the two oil producers to resolve.